Modeling and simulation of price elasticity of demand using an agent-based model

Automated Metering Infrastructure (AMI) is an enabling technology that would allow consumers to exhibit price elasticity of demand under smart-grid environments. The market power of the generation and transmission companies can be mitigated when consumers respond to price signals. Such response by consumers can also result in reductions in price spikes, consumer energy bills, and emissions of greenhouse gases and other pollutants. In this paper, we use the Electricity Market Complex Adaptive System (EMCAS), an agent-based model that simulates restructured electricity markets, to explore the impact of consumers' price elasticity of demand. An 11-node test network with eight generation companies and five aggregated consumers is simulated for a period of one month.